The EUCompetitiveness Council took place in Brussels on 20 and 21 February 2012. I represented the UK on internal market and industry issues on 20 February, and Andy Lebrecht, Deputy Permanent Representative to the EU, represented the UK on research issues on 21 February. A summary of those discussions follows.

The main internal market and industry issues discussed on 20 February were; Europe 2020; public procurement; the accounting directive, which was also the subject of the lunchtime discussion; social entrepreneurship and venture capital funds; and smart regulation.

An orientation debate was held on the Europe 2020 strategy, linked to the 2012 annual growth survey. Discussions from this Competitiveness Council, and other sectoral Councils, are due to feed into the March 2012European Council conclusions. All member states intervened positively. I intervened to press for completion of those growth measures that were already in the pipeline, that is: concluding free trade agreements, fully implementing the services directive, continuing to deregulate our professions, reducing regulatory burdens and creating a fully functioning digital single market. Some member states also called for greater reciprocity with respect to the external dimension of the single market. I intervened to counter these calls.

A second orientation debate was held on the proposal to update the public procurement package. I intervened to press for greater flexibility in the procurement rules, and was supported by several other member states in this regard. I also called for the retention of the current distinction between so called “A-Services” and “B-Services”, which are currently subject to different regimes. Specific to the UK, I also called for the Commission to consider whether fledgling mutuals should be subject to full EU rules from the outset, and whether it might be appropriate to introduce a time-limited exemption.

Over lunch, and subsequently in formal session, there was a discussion on the accounting directive. This focused on the proposed requirement for increased transparency in the payments from mining and extractive companies to Governments, on a per-country and per-project basis. I led the discussions by supporting the ambition of increasing transparency in the sector by developing a meaningful reporting regime, while also stressing the importance of our extractive industries remaining competitive. I also called for the materiality threshold, the monetary level at which reporting occurs, be set out in the directive.

The final orientation debate focused on venture capital and social entrepreneurship funds, and there was broad support for the proposals. Some member states called for a heavier regulatory regime to include the need for depositaries, though this received little support and the UK intervened to call for a light regime.

The Council agreed conclusions on smart regulation. Poland intervened to support the conclusions.

There was one AOB point on day one regarding the patents package. Several member states intervened to call for the swift conclusion of the outstanding issues.

The main research and space items discussed on 21 February were: the global monitoring for the environment and security (GMES) programme; the annual growth survey in the context of the Europe 2020 strategy; and scene-setting discussions on the Horizon 2020 package with a focus on international collaboration, SME support and the social sciences and humanities.

In the orientation debate on GMES, the UK and several other member states intervened to state that it should be funded from within the EU budget.

On the annual growth survey, member states noted in particular the need to develop complementarities between national and EU-level research programmes through simplified public/private partnerships; and to improve the focus on demand-side measures that could stimulate innovation, including strengthened support for pre-commercial public sector procurement as a means of driving investment in new products. The UKintervention referred to measures adopted at national level.

On the European Institute of Innovation and Technology (EIT), Commissioner Vassiliou introduced the Commission’s proposals, noting that it was a crucial feature within Europe’s wider package of support for innovation, and that the EIT was now delivering results through the knowledge and innovation communities (KICs).

On the bioeconomy. Commissioner Geoghegan-Quinn introduced the Commission’s communication “Innovating for Sustainable Growth: a Bioeconomy for Europe”, stating that the smart and sustainable use of biological resources and waste was now a necessity given the dual pressures of diminishing fossil resources and global population growth. By making smart investments the EU could maintain global leadership in and secure new sources of business growth. This was followed by an exchange of views over lunch, during which member states expressed support for a more coherent approach to policy-making in this area, noting that the issue was too diverse to be handled by a single directorate-general.

On Horizon 2020, the presidency hosted a further orientation debate, inviting Ministers to explore the support that will be required to ensure that the social sciences and humanities (SSH) are fully integrated within the programme. Ministers were also invited to explore the support necessary for SMEs, and the measures needed to fully embed international co-operation in the programme. Member states, including the UK, expressed strong support for the principle of embedding support for SSH throughout Horizon 2020, with many arguing that technological advances that were not accompanied by a firm understanding of the potential socio-economic and behavioural impacts were less likely to be adopted by citizens. Several member states supported enhancing international co-operation, notably in the context of addressing global societal challenges. Many member states, including the UK, underlined the need to foster participation by SMEs, including through the proposed debt and equity facilities and specific measures for SMEs. Some member states highlighted the need for member states to provide direct networking and mentoring support to SMEs and universities to improve synergies between the two. The UK noted we would be reviewing support available to SMEs. The presidency reaffirmed its ambition to work towards political agreement (“partial general approach”) at the May 2012 Competitiveness Council.

Under AOB, Commissioner Geoghegan-Quinn provided an update on Commission preparations for a European research area framework and noted that a recent public consultation had highlighted obstacles to researcher mobility and careers as key obstacles to the development of a genuine single market in research within the EU. On international thermonuclear experimental reactor programme (ITER), UK and several other member states called on the Commission to include funding within the next multi-annual financial framework (MFF) as placing the programme outside the MFF risked sending damaging signals about political support for the project, which the EU is leading on. The presidency provided information on the informal Council it hosted in Copenhagen on 2 February 2012.